Funds roughed up in April: Morningstar

(May 4, 2004) April was a rough month for Canadian mutual fund investors, after shocks at home and abroad sent several key investments spiraling lower, according to early data from Morningstar Canada.

Fund performance was mostly weak for the month, with 22 of the fund monitor’s 32 indices posting a loss on the month, but there were some bright spots.

Top performers included the Healthcare index (up 5.7%), European Equities (3.1%), Global Equity (2.1%) and International Equity (2.0%).

The healthcare boom was fuelled by Aventis’s agreement to Sanofi’s $65 billion takeover bid — which also boosted the European Equity index — and advances in lung cancer research by OSI Pharma with its partners Genentech and Roche.

European stock funds owed some of their month-over-month gains to the poor performance in March, which witnessed the terrorist bombing of a train in Madrid.

“The euro has also weakened against the U.S. dollar, nearing a five-month low, which has aided European exporters,” said Morningstar Canada analyst Mark Chow.

The worst performance of the month was posted by the Precious Metals index, which plummeted 17.2%, after a strong showing in March. Commodities have been one of the brightest spots in the market lately, but in late April traders sold off the stocks on news the Chinese government was moving to slow economic growth.

Second and third worst indices were Latin American Equity and Canadian Income Trusts, which dropped 7.7% and 5.5% respectively. Other Canadian equity-based indices were hit at the end of the month when the latest news from Nortel sent the widely held technology giant into a tailspin.

U.S. equity funds did better, with the U.S. Equity index gaining 1.6% and U.S. Small Cap Equity index rising 1.3%.

Filed by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com